Only 28% of UK adults can correctly explain compound interest, inflation and risk diversification – the three concepts that underpin sound financial decision-making. This stark finding comes from the Number Nation study, one of the largest of its kind, commissioned by The Richmond Project, a charity founded by former prime minister Rishi Sunak and his wife Akshata Murty. The survey of 10,000 people found that four in ten UK adults fall into the “poor” or “very poor” categories, meaning they answered none or only one of the three core questions correctly.
The ability to grasp these “big three” concepts is not an academic exercise; it has direct, measurable consequences for personal finances. Without understanding inflation, individuals often stick to cash savings believing they are safe, when in fact inflation steadily erodes the purchasing power of that money. Without knowledge of risk diversification, taking the step into investing can feel intimidating, leading people to miss out on potential returns. And without familiarity with compounding, wealth accumulation is significantly reduced. The Richmond Project, co-founded by Sunak and his wife, describes the problem as “a structural problem with measurable economic consequences – for individuals, for families and for our country”. Those consequences are starkly illustrated in the study: among adults with strong financial literacy, 81% could cover an unexpected £1,500 expense, compared with just 38% of those with very poor literacy.
The gap between perceived and actual knowledge is wide. Research by Pay.UK in October 2024 found that 78% of UK adults consider themselves financially literate, yet 71% do not know how a savings account works. Inadequate numeracy also forces 21% of British adults to rely on others to manage their finances. The economic cost of low financial literacy has been estimated at £25 billion per year for the UK economy. A quarter of UK adults believe stronger numeracy skills could have helped them navigate the cost-of-living crisis, with 42% saying they could have saved more and 41% saying they could have budgeted more effectively. Confidence in mathematics is strongly correlated with financial understanding: adults with low financial literacy are significantly more likely to name maths as their least favourite school subject.
Women disproportionately affected
The Number Nation study reveals a significant gender gap. Men consistently outperformed women on the three key questions, and the gap widens in midlife – from around 10 percentage points in early adulthood to 22 percentage points by ages 45 to 54. This is a critical period when retirement planning, mortgage costs and childcare expenses are at their most demanding, meaning women are at greater risk of making poorer financial decisions. The UK’s gender gap in financial literacy is the second widest among 30 OECD countries. Further research from Aberdeen in March 2026 indicated that 13.7 million women in the UK have poor financial literacy, compared with 7.4 million men, with women disproportionately represented in the “very poor” category. Globally, 35% of men are financially literate versus 30% of women, with women more likely to answer “don’t know” to financial literacy questions.
The UK’s overall performance also lags behind other developed nations. Countries such as Germany, Switzerland, the Netherlands, Australia, Canada and Finland have some of the highest levels of understanding, with rates around 65% or more. “The UK is falling behind our competitors. But there’s no reason why we can’t have as good financial literacy as Germany or the Netherlands,” said Rishi Sunak. “Closing this gap must be a priority, not an afterthought.”
Financial education in schools – a long-overdue reform
The UK is set to introduce financial education into the national curriculum for all primary and secondary schools by 2028. The Richmond Project said it is working with the Department for Education to help develop the new financial literacy curriculum, with a particular focus on the “big three” concepts. This follows the charity’s February 2026 launch of “Books Count”, an initiative to boost children’s confidence with numbers by integrating maths into reading and storytelling. The programme, run in partnership with the Bookmark Reading Charity, includes a monthly book club and the distribution of number-themed storybooks to primary schools with lower-than-average reading results and higher-than-average deprivation.
Financial education has been part of the National Curriculum in England since September 2014, embedded mainly in citizenship for Key Stages 3 and 4 (ages 11–16) and also in mathematics. But coverage has been patchy: academies and free schools are not always required to follow the National Curriculum, and a 2022 survey found that over two-fifths of secondary school teachers were unaware that financial education was a curriculum requirement. Consumer campaigner Martin Lewis has been pressing for universal financial education in schools since 2010, noting it is the subject pupils most request and parents most ask for. The planned 2028 reforms aim to address these gaps, with the “Children’s Wellbeing and Schools Bill” also intending to ensure all state schools, including academies, integrate financial education.
The challenges start early. The Number Nation study found that around 45% of school pupils aged 9 to 18 are classified as having poor or very poor financial literacy. The Richmond Project’s second phase of research follows an earlier study published in January 2026, which showed that 58% of UK adults scored low or very low on a maths competency index. The questions used in the Number Nation study were originally developed by professors Annamaria Lusardi of Stanford University and Olivia Mitchell of the Wharton School, and are the globally accepted benchmark for evaluating basic financial knowledge. Worldwide, only 33% of adults are considered financially literate, leaving approximately 3.5 billion adults lacking understanding of fundamental concepts.
